What makes search powerful is targeting. Searchers prequalify themselves for your products or services. Pretend you are an interior design firm. You may try to capture the phrase "interior design," but it would not be as targeted as a phrase like "interior design firm" or better yet "hire an interior design firm." The first person may be looking to spend $4 or just browsing, but the last searcher showed some real intent to buy.

The more targeted your terms are the better your conversion rate will be. Short terms are where a great deal of the fat rests. People false clicking, buying tons of links, spam central...looking for the deep targeted terms can help you out a bunch.

Dan Thies, of SEO Research Labs, recently created an Excel Spreadsheet to help you calculate the value of different phrases. It requires that you assume a % of relevancy for different terms, and then multiplies those terms by their search distribution to help you see how much targeted traffic each term gets. The idea is discussed in more detail here.